from the no-competition-allowed dept

We've talked in the past about Apple's quite arbitrary approval process for apps via its walled garden, noting at times that Apple just likes to keep out competitive apps. At least one company is questioning whether or not this is legal. Via Hypebot, we learn that Simfy (often called the Spotify of Germany) has complained to German regulators that Apple has not yet approved its iPad app, despite having submitted it months ago. The company pointed out that Apple has already approved an iPhone app from the company, and it seems strange that it's been stalling so long on the iPad app. Of course, given the timing of the announcement of Apple's new iCloud music service, Simfy certainly seems to feel that this move was anti-competitive. Of course, on the flip side, that's what you get for relying on a mostly closed platform. Time for Simfy to see if it can figure out a way to make an HTML5 web app instead.

from the android's-gonna-win dept

I spent the last couple days at Google's big developer conference, Google I/O. While officially a developer conference, the event is often a window into Google's overall thinking on where it's headed. There are a lot of new products and features shown off -- some more ready for prime time than others. The clear takeaway from the overall event is that Google doesn't just believe that we're moving to a more connected world, it's grown sick of waiting for everyone else to develop it, and is laying the groundwork itself. So much of the event was about new offerings that enable more advanced things to happen via the internet and via devices. From a standpoint of pure geekery, it's pretty cool to see that vision in action.

However, there was one other thing that became abundantly clear at the event, and it's that Google is on an internal collision course with itself. Day one of the event was all Android, all the time, and day two of the event was Chrome, Chrome and a little more Chrome (for good measure). With Android, the talk was basically about expanding Android everywhere. While Google had rushed out a separate and distinct version of Android for tablets, it is bringing the tablet version and the phone version back together and also looking to put it on other devices (e.g. Google TV will be powered by Android as well). On top of that, Google is looking to expand the overall purview of Android, by making it easier to control all sorts of hardware and devices as well. The vision, effectively, is that Android becomes the remote control for, well, everything. Others have tried similar strategies and failed, but it's ambitious, and sooner or later someone's going to figure it out, and Google has as good a chance as anyone.

On the Chrome side, the company continues to make improvements to Chrome itself, increasing performance massively, and continuing to allow people to do more with HTML 5 directly in the browser. On top of that, Google is really ramping up its "Chromebook" strategy of offering very cheap computers with the "ChromeOS" and with built-in cheap or free wireless.

Of course, this raised all sorts of questions about the fact that both strategies are on a clear collision course, and it's not obvious that Google has any plan on what to do about it. This shouldn't be a surprise. Two years ago, when Google first announced the Chrome-as-operating system strategy, our very first reaction was that it was going to lead to conflict with Android. And that was clearly on display at the event. Asking folks from either team about this odd split would lead to mumbling and dancing around the question. It seems clear that the two teams don't have much, if any, collaboration going on, and both are charting their own courses that seem to be starting to encroach on each other's territory. That's most obvious with Google TV. While the product has been slow to catch on, the original version was focused on Chrome, but it sounds like Android is now taking over.

Now, there's something to be said for some internal competition. It helps drive both groups forward, and lets them take different and experimental approaches in a new world where what's going to work is a huge unknown. Traditionally, though, if most companies allow for such competition, it's usually an upstart "skunkworks"-type operation against a legacy operation. In this case, it's two upstarts. And the risk there is what happens when they clash. The fact that there's no Chrome browser on Android (and the default Android browser is pretty bad) just seems bizarre.

At some point, Google is going to need to merge these two strategies, rather than just let them fight each other. Perhaps the big thinkers at Google think that time is further down the road, but it seems like soon would be a good time to start integrating the strategies. For now, however, it seems happy to let the two just remain on the collision course. And while I have no doubt that they believe both strategies are important, it wasn't hard to read the tea leaves as to which of these two Google is betting more on: the entire third floor of the Moscone Center was about Android. In contrast, Chrome had a much smaller section at the back of the second floor. Google may claim that it's treating the two equally, but its actions scream loudly that the big bet is on Android.

from the regret-pushing-the-button dept

Nokia, who used to absolutely dominate the mobile phone market, has definitely seen better days. The iPhone really took it by surprise and the company really hasn't done a particularly good job reacting to the rise of the smartphone market. So, like plenty of companies who once innovated, once it started losing in the market, it shifted to litigation. Just a week after the company's first ever quarterly loss, it sued Apple for patent infringement over the iPhone. It actually took two cracks at Apple in that it also used the ITC loophole to go after the company twice.

Of course, in true patentland fashion, when a big tech company sues another big tech company for patent infringement, patent nuclear war ensues, as Apple sued back claiming that Nokia infringed on its patents. While the various lawsuits are still ongoing, it appears that Nokia's first shot via the ITC loophole has been a big failure, as the judge has ruled that Apple didn't infringe at all. It's worth noting that many consider the ITC to also have a lower bar, so this might not bode well for Nokia's lawsuit. Of course, Apple's lawsuit against Nokia remains as well... meaning that this little attack on Apple could conceivably end very, very badly for Nokia.

from the fight-fight-fight dept

Microsoft has been tiptoeing around its claims that Android violates certain Microsoft patents, carefully choosing who to sue. For example, it's sued Motorola, but hasn't sued Google. The latest is that it's suing Barnes & Noble for infringing on its patents, claiming that the Nook ebook reader, which uses Android, violates its patents. The patents in question all seem to cover astoundingly obvious concepts that Microsoft should be ashamed to hold patents on and be asserting:

Method and apparatus for capturing and rendering annotations for non-modifiable electronic content: 6,957,233

It's always sad when companies focus more on litigating rather than innovating. I mean, seriously, does anyone think that, without patents, people wouldn't have made these kinds of advancements? These aren't advancements that requires a patent at all. These are the kinds of advancements that happen naturally in the marketplace due to competition and multiple companies competing to offer a better product to customers.

Of course, it's nice to see the response on Microsoft's own blog involves comments trashing Microsoft for this decision. Scrolling down the comments, almost all of them are incredibly negative against Microsoft, pointing out that these patents are obvious, that Microsoft should be ashamed of itself for suing, and people swearing off Microsoft products for being a patent bully. Perhaps Microsoft might want to think its patent litigation strategy in recognizing that it's not particularly well received by consumers.

The comments really are great, but my favorite may be: "None of this BS will get anyone to buy a Windows phone anyway." And that's kind of the point. Microsoft should focus on innovating. Not bitching about what competitors are doing better than it did.

from the no-one dept

There was lots of press coverage about the FCC's broadband plan on Monday, as the commission released an exec summary of its nearly 400-page plan for broadband in the US. If you want to wade through the details, it's all there online for you. But, if you want a basic summary, it appears that, like pretty much everything this FCC is doing, it's a lot of talk and little of consequence. So far, I've seen statements from lobbyists on pretty much all sides of the issues "commending" or "applauding" or "supporting" the FCC. And that's because there's basically nothing controversial and nothing big at all in the plan. It appears to try to thread the needle and keep everyone happy -- and in doing so, it appears to punt on the all-important questions. If it was really about making the necessary changes, key players would be up in arms. But they're not.

The report pays lip service to greater competition and talks about getting better data and about making better use of wireless spectrum. Well, duh. But it takes no bold steps -- does nothing to really take control out of the hands of the incumbent telco providers -- just as we originally expected, even if really disruptive, but necessary, ideas were considered, they don't appear in the final plan.

In the end, it's the kind of plan you put forward if you're being political and don't want to make waves. It's not the plan you put forward if you're making a bold leadership statement about how to really expand broadband in this country. Too bad.

from the leave-us-alone dept

Back when the $7.2 billion broadband stimulus plan was announced, we were a bit worried that it was really just a bailout plan for incumbent broadband providers. The focus of the plan was on "shovel ready" projects in an attempt to create jobs, and that generally meant incumbent providers who could hire a lot of people. The last thing the government wanted to do in the middle of a recession was help fund an innovative startup that would disrupt a big employer. But there was one interesting aspect of the stimulus package: it suggested that anyone taking the government money would have to share access to infrastructure -- something that makes a lot of sense, if you're encouraging competition.

But, of course, the incumbents don't want competition at all. They've based their entire business models on the very lack of competition in the marketplace. So, it quickly became clear that they would not only resist taking any of the money, but they would actively seek to block upstarts from taking it as well. And... that's exactly what appears to be happening. lavi d points us to the news that lots of smaller companies are applying for the federal funds, and (surprise, surprise) the incumbents are not applying for the funds at all, but are drafting legislation in various local governments to prevent any upstart competitors from getting those funds. So, not only is it not stimulating the creation of jobs, it's not really providing much more broadband or competition.

from the ah,-monopolies dept

Christopher alerts us to the news of an Apple patent application (20090325603) that was just published that appears quite similar to Google's location tracking service, Google Latitude. What makes this story more interesting is the fact that Apple barred Google Lattitude from the iPhone app store. Of course, Apple has a history of barring competitive apps, but that's also brought about regulatory scrutiny from the federal government over whether or not Apple is abusing its market position. Blocking an app while patenting the same thing certainly doesn't look good. But, of course, isn't that what patenting is all about? It's a government granted system for blocking competitors.

from the jump-in dept

There are plenty of stories today about the not-so-secret "Google Phone" known as the Nexus One (assuming no silly legal issues get in the way) was finally "officially" announced. There wasn't much surprise at the announcement, other than the fact that Verizon Wireless is expected to get the phone in the spring as well, meaning that there's a CDMA version out there somewhere. Nearly every story about the phone has played the paint-by-numbers game of asking "is this an iPhone killer." To be sure, the Nexus One (which I have had a chance to play with) is extremely iPhone-like. But pitting it head-to-head against the iPhone may be the wrong way of thinking about it.

As he often does, Bill Gurley cuts through the clutter to make a really strong point. The iPhone and its closed system were designed for the top of the market only. Google isn't necessarily looking to compete with the iPhone or take users away from the iPhone -- it's looking to attract the market of "everyone else," for whom the Nexus One (or other Android Phones) represents a huge upgrade over what they have:

The iPhone does exist, and it is wildly popular. There are an estimated 55 million iPhones in use around the world. Despite this remarkable success, history will also show that Apple intentionally chose a business model with plenty of room for disruption underneath its pricing structure. It also chose a single carrier as a partner, which resultantly threatened others. Then Google built a product and a strategy that allayed the carrier's relative fears. Google gave them what they wanted, and then even gave them money. It could afford to do this because Google aims solely to protect the great business they already have in advertising, not to make money directly from the product (HW or SW in this case). Microsoft Windows, Internet Explorer, and Mozilla's Firefox represent choke points on the personal computer whereby Google could lose search share, or at least be forced to pay a toll. In mobile, they see a chance to potentially eliminate the toll-takers.

With a business model that allows for much broader distribution and price points that are well beneath the iPhone, Google's Android won't compete directly with the iPhone. For the iPhone loyalist, like Stewart Alsop who railed against Android, Android is simply not an option. This price insensitive user demands the very best experience they can possibly have and this is still the iPhone. Users won't switch in mass from the iPhone to the Android. It's the other 3.95 billion cell phone users that are highly likely to consider Android a step up from their current feature phone. The Android strategy results in phones at much lower prices with much more diversity which will hit a broader set of demographics. Apple can and will quintuple its current market share and still have a small portion of the overall cell phone market.

This is why the two products do not compete head to head. With its super aggressive model, Android will be the choice of the masses, and with its sleek design and non-compromising price point, Apple will rule the high end.

While I think Gurley overplays the claim that the Android strategy results in "phones at much lower price points," since that hasn't happened yet, there are a number of good points raised in this article. In many ways it goes back to the discussion we had a year and a half ago about the differences between open and proprietary strategies. The closed, proprietary, "walled garden," strategies have advantages in brand new markets -- no doubt. They are less chaotic, more user friendly and simply easier to grasp for many. But, in the long run, the open solutions almost always win out. The solutions that allow others to jump in and add stuff, change stuff or make stuff better. It may take some time, and the lead time for the proprietary solution may seem insurmountable, but overtime, the more open solution almost always wins out. Remember when AOL and its walled gardens were going to dominate the "open" internet? It seems likely that the same thing may play out in the mobile space.

The second point that I think is key is the recognition that Google has the opportunity to play a bit of business model jujitsu against competitors with Android, noted in this sentence: "It could afford to do this because Google aims solely to protect the great business they already have in advertising, not to make money directly from the product (HW or SW in this case)." This is a point that we discuss in a variety of different business markets. It's why we think that those who understand how to embrace the difference between scarce and infinite goods have a huge advantage. If you can make money by giving away a product for free that some legacy business relies on charging for -- and then making your money up in an ancillary market (made bigger by giving your product away for free), then you have a massive advantage to disrupt the market.

The problem, however, with Gurley's post is that it isn't clear that Google is actually doing any of this. As noted, the pricing on the Nexus One is hardly revolutionary, and seems quite standard. Gurley is right that Google with Android has an opportunity to do something disruptive, but it's not clear it's there yet.

from the it's-a-start dept

You don't really expect the Justice Department to be involved in the question of spectrum allocation, but it has suggested that the FCC free up more spectrum for broadband efforts. The reason is that this is coming from the antitrust division of the DoJ, and the hope is that with more spectrum, it can be allocated to upstart competitors which will increase competition in the not very competitive broadband market (and don't believe the telco lobbyists who claim otherwise).

Still, if we're talking about freeing up spectrum, shouldn't things go a bit further? We still have a situation where the FCC doesn't just allocate the spectrum, but also decides what it must be used for. We'd be much better off, and have a lot more competition, if companies were free to make use of spectrum in the way they felt could bring the best return -- and that companies who were granted spectrum rights also had the right to then resell those rights. While I'm still hopeful that new technologies will make spectrum scarcity a thing of the past, we still haven't seen enough evidence that the technology really works. So, in the meantime, the better solution is to get more spectrum on the market, and stop putting limitations on how it can be used.

from the if-we-won't,-no-one-can... dept

It's no secret that many ISPs prefer to have a monopoly. We've seen it over and over again in efforts to block competitors from getting into the space, while at the same time they lobby the government for more rights of way and other benefits. The latest example is CenturyLink (a combination of CenturyTel and Embarq) in North Carolina. The company has made it clear that it won't provide DSL to certain "low density" areas. And if that's what it wants to do, fine. But, it shouldn't then try to block those who do want to offer broadband, such as Electronic Solutions Inc., which Broadband Reports notes has applied for federal broadband stimulus funds to offer wireless broadband services in those areas. Yet, CenturyLink has filed a complaint with the government saying that because it offers broadband in "some or all" (see what it did there?) of the areas ESI wants to provide service in, CenturyLink is suggesting that the feds shouldn't give ESI the money it's asking for.

Now, this is a case where accurate data on broadband penetration might be helpful, but when Connected Nation keeps winning contracts to provide such maps -- and Connected Nation is set up by the same broadband incumbents who don't want competition, guess how accurate those maps will be?